1. Market discipline would produce a better healthcare system.
2. ?
3. Profit!

The editors of the Wall Street Journal complain about the evils of “government healthcare”:

President Obama addressed the Veterans Affairs scandal on Wednesday, saying he’s waiting for an Inspector General “audit” of what went wrong. And the press corps is debating whether VA Secretary Eric Shinseki should be fired. These are sideshows. The real story of the VA scandal is the failure of what liberals have long hailed as the model of government health care.

Don’t take our word for it. As recently as November 2011, Paul Krugman praised the VA as a triumph of “socialized medicine,” as he put it: “What’s behind this success? Crucially, the V.H.A. is an integrated system, which provides health care as well as paying for it. So it’s free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, whether or not those procedures actually make medical sense.”

Ah, yes, the VA lacks the evil profit motive. What the egalitarians ignore, however, is that a government system contains its own “perverse incentives,” such as rationing that leads to treatment delays and preventable deaths, which the bureaucracy then tries to cover up. This isn’t an accident or one-time error. It is inherent in a system that allocates resources by political force rather than individual consumer choices. The VA is ObamaCare’s ultimate destination.

I think they’re missing some basic things. We haven’t had anything approximating free market healthcare in the United States for about a century, there are basically no prospects for ever having such a system again, no one would like going back to such a system, and the promise of a free market healthcare system is that it would optimize welfare in the economic sense of producing the greatest quantity of healthcare at the lowest prices for those willing to pay. It does not promise that ordinary people won’t drop dead in the streets of preventable causes, that the diseases of the poor won’t spread to the rich, or that a world with free market healthcare would be one that any of us would want to live in. All of those things require some level of “government healthcare” so we’re stuck with it.

The challenge that we face is how to be prudent stewards in the face of scarcity and human nature. Minimizing the role of government or maximizing it are trivial in difficulty by comparison. They’re the easy, simple-minded, and completely unsatisfactory solutions. Prudence is always the scarcest commodity.

I see that Internet entrepeneur Mike Hudack has a complaint about today’s journalism that may relate to mine of yesterday:

It’s well known that CNN has gone from the network of Bernie Shaw, John Holliman, and Peter Arnett reporting live from Baghdad in 1991 to the network of kidnapped white girls. Our nation’s newspapers have, with the exception of The New York Times, Washington Post and The Wall Street Journal been almost entirely hollowed out. They are ghosts in a shell.

Even these three survivors face great challenges and I doubt anyone would call them “healthy” or laud their courage in journalism. They just report what people tell them, whether it’s Cheney pulling Judith Miller’s strings or Snowden through the proxy of Glenn Greenwald doing roughly the same. They seem incapable of breaking real, meaningful news at Internet speed. It’s why they like Twitter so much. Twitter does the hard work for them.

He continues in that vein. I wonder if Mike realizes that he has or, more accurately, other hes in the wacky world that the Internet has brought us have fostered the attitude that may be once of the factors underlying the change.

Once upon a time a small number of people derived their incomes from coupon-clipping. I don’t mean the coupons for soap or frozen dinners in newspapers or online. Bonds used to have coupons attached to them. When the coupon matured the bearer of the bond could clip the coupon and present it for payment. “Coupon-clipping” was a symbol of wealth and indolence.

The modern equivalent of coupon-clipping is passive income. Put Google Adsense ads on your web site; earn money. That’s “passive income”.

There are two things missing from that model. The first thing is what’s referred to as “the long tail”. A very small number of sites garner most of the hits and, consequently, most of the income. Most of the sites earn very little income. Pennies or a few dollars a day is commonplace. In other words living on passive income is only a viable business model for a small number of sites.

The other thing that’s missing is that somewhere somebody must be making or selling something from which that income ultimately derives. No sales; no passive income.

How does that relate to journalism? Somehow the society has been infected with the idea that you, too, can earn millions from passive income, forgetting that there’s got to be underlying economic activity for that to work. In the newspaper business that’s either advertising or stuff that people want to read.

Newspaper advertising is on the skids through a combination of Google, mobile technology, and Craigslist. The political blogosphere has demonstrated that there’s very little reason to pay to read opinion. That leaves reporting and doing reporting that people will pay to read has always been difficult and you don’t earn passive income from it. Ben Franklin didn’t make money from his newspaper. He made money as a printer and produced his newspaper when business was slow and he had time on his hands.

I think there’s a dream of reporter-free news media with stories written by computers, gleaned by scouring the pages of Twitter or Facebook. What I can’t figure out is why anybody would pay to read those stories.

Reporting is a craft, it’s learned by doing it, and you can’t step out of J-school and expect to be a competent reporter. It requires patience and tenacity. I think it’s possible to earn a little money by reporting but probably not enough to pay off J-school debts and have a middle class lifestyle and certainly not enough to have the lifestyle of a physician let alone that of a financier.

Presumably in an attempt at motivating black voters in anticipation of the midterm elections, I’ve seen several articles lately about reparations for slavery. I’m not completely unsympathetic with the idea but I think it’s an entirely political notion that founders in practice.

In order to justify it, you’d need to come up with a good explanation for why a Korean immigrant who arrived in this country in 1990 should pay reparations to a Ghanan immigrant who arrived in this country in 1990. I can see an argument for descendants of slave owners or companies that benefited directly from slavery paying reparations to the descendants of slaves. But most white Americans aren’t the descendants of slave owners, most of today’s companies didn’t benefit from slavery, and many blacks aren’t descended from American slaves. The present incumbent for one.

The past is a bucket of ashes.

For the last couple of days there’s been a covey of op-eds, editorials, and opinion pieces highly critical of the president from both friends and enemies. I was going to write a lengthy analytical post on the subject but I found that just too depressing so I’ll cut to the chase.

Every president wants to be judged based on the effort he puts in and his predecessor to be judged based on results. That was the whole thing behind that heckuva job, Brownie bit in the aftermath of Hurricane Katrina. It was judging by effort rather than by results.

I don’t honestly case how hard presidents work, how benign their intentions are, how awful the Congress is, what a mess his predecessor left him with, how uncooperative the Russians, Chinese, etc. are, or how hard it is for the president to do much about the economy, the climate, etc. I didn’t force anybody to run for president. Every president has sought the job.

Lead, follow, or get the heck out of the way.

What the heck is going on? The news environment, the raw material that blog posts are formed from, is remarkably fallow these days. It’s not as though there’s nothing going on. Thailand, Iraq, Syria, Ukraine, Sudan, and Libya are all coming apart at the seams. We’ve got “boots on the ground” in Chad (remember: the Viet Nam War metastasized from a handful of military advisors over the period of a decade).

The president has added yet another scandal to his pile. This time it’s people dying waiting to get treatment from the VA and an apparent cover-up of the actual results. That’s something that should be familiar to any Chicagoan: massage the statistics rather than address the problem.

Far from being in anything resembling a robust recovery, the economy is supine.

It’s not as though there’s nothing to write about. Are they waiting for something?

I’ve just published a foreign policy-related post at Outside the Beltway:

Is “Finlandization” an Option?

Is a a neutral posture between “the West” and Russia really an alternative for Ukraine? Reacting to a column by David Ignatius I summarize Finlandization, explain why it makes sense, and ask a few questions. I think there are more questions here than answers.

My experience in life is that whenever you think you’ve imagined the worst possible outcome of a course of actions you learn that you’ve been unduly optimistic. The editors of the Wall Street Journal reacted to Secretary of State John Kerry’s pitch for the Obama Administration’s energy policy:

Secretaries of State may want to stop making statements in the form of questions, à la “Jeopardy.” First Hillary Clinton declared “what difference at this point does it make?” regarding the reasons that four Americans died in Benghazi. Then on Monday John Kerry told graduates of Boston College that even if he’s wrong about climate change, it won’t cost a thing.

“The solution is actually staring us in the face. It is energy policy. Make the right energy policy choices and America can lead a $6 trillion market with four billion users today and growing to nine billion users in the next 50 years,” Mr. Kerry said in his commencement address, referring to climate change. Then came the odd poser.

“If we make the necessary efforts to address this challenge—and supposing I’m wrong or scientists are wrong, 97% of them all wrong—supposing they are, what’s the worst that can happen?” Mr. Kerry said. “We put millions of people to work transitioning our energy, creating new and renewable and alternative; we make life healthier because we have less particulates in the air and cleaner air and more health; we give ourselves greater security through greater energy independence—that’s the downside.”

with their own scenario of downside risk:

The “worst that can happen” is that we spend trillions of dollars trying to solve a problem that we can’t do anything to stop; that we misallocate scarce resources in a way that slows economic growth; that slower growth leads to less economic opportunity for Boston College grads and especially the world’s poor, and that America and the world become much less wealthy and technologically advanced than we would otherwise. All of which would make the world less able to cope with the costs of climate change if Mr. Kerry is right.

Leave aside Mr. Kerry’s instantiation of the fallacy of the broken window. I think that even the WSJ editors are being unduly optimistic. An even worse scenario is that my speculation that carbon emissions increase faster than linearly with wealth and income is correct, that solar and wind power remain at most backup power for the foreseeable future, and that global demand for oil continues to grow, as you would expect if the Jevons paradox holds. In that case none of the neoliberal strategies that have been proposed for reducing carbon emissions, e.g. a carbon tax or “cap and trade”, will have anything but the smallest effect on emissions, we will encourage increased oil and coal consumption by the Chinese and Indians, we will have more carbon emissions and, presumably, a greater risk of climate volatility, with lower economic growth and fewer jobs than we would otherwise have had.

We can’t imagine the worst thing that could happen.

There’s an interesting article at the Washington Post on what you can learn from observing dogs at play:

A shaggy brown terrier approaches a large chocolate Labrador in a city park. When the terrier gets close, he adopts a yogalike pose, crouching on his forepaws and hiking his butt into the air. The Lab gives an excited bark, and soon the two dogs are somersaulting and tugging on each other’s ears. Then the terrier takes off and the Lab gives chase, his tail wagging wildly. When the two meet once more, the whole thing begins again.

Watch a couple of dogs play, and you’ll probably see seemingly random gestures, lots of frenetic activity and a whole lot of energy being expended. But decades of research suggest that beneath this apparently frivolous fun lies a hidden language of honesty and deceit, empathy and perhaps even a humanlike morality.

My experience has been that dogs have a very well-developed sense of fairness. That varies somewhat from dog to dog, of course, just as it does from human to human. The most extreme example I’ve ever known is that our first dog, Qila, when offered a treat in exchange for some behavior or other (sit, stay, etc.), would refuse the treat if the behavior wasn’t something he wanted to do.

I don’t think that this

Other studies have revealed that dogs yawn when they see humans yawning and that they nuzzle and lick people who are crying; scientists consider both behaviors displays of empathy, a rarely documented trait in the animal kingdom.

is being properly interpreted. For dogs yawning is a sign of stress. When you yawn, they assume you’re stressed and yawn back to calm you down. However, not only do I think that dogs have empathy, I think their sensory equipment is much better attuned to identifying what’s wrong with you than ours are. We’ve got to ask. Dogs know where your aches and pains are by your scent.

Apparently, there has been no measurable increase in the number of new sick patients as a result of the PPACA

In our previous report, we saw that, at least for the first quarter, a national sample of 12,700 physicians across the athenahealth network did not see an increase in new patients[1] due to the ACA. While not all new patients are newly insured, an increase in this population would suggest that coverage expansion is having an impact on medical practices. Instead, the percentage of total provider visits with new patients actually dropped slightly in the first three months of 2014 compared to 2013. Several factors may help explain why the ACA’s coverage expansion has not led to an immediate and measurable impact:

1. The number of newly insured patients in the first quarter of 2014 may have been too small to have a measurable impact.
2. Not all newly insured patients required care.
3. It may require weeks or months for patients to schedule appointments and be seen.

Our data suggests the influence of new patients on provider activity may take considerable time to unfold. Figure 1 shows the percentage of visits by new patients to Primary Care Providers (PCPs) at practice locations active before 2011. New patients account for 15% to 20% of office visits in the beginning of the year, growing as a proportion throughout the year. Note that a patient defined as new at any point during 2014 remains classified as new throughout the entire calendar year. In other words, these new patients are tracked as a cohort as the year progresses. We chose this definition to measure the level of effort physicians place in treating patients that are new to the practice across the year.

That’s a mixed bag. On the one hand it suggests that the new load on the healthcare system may be bearable but on the other it undercuts the argument in favor of the PPACA. The PPACA may have been the easiest thing for the Democratic Congress of 2009 to enact but it may not have been the reform that was needed. As to whether it will be sustainable, it’s just too early to tell.

The linked post is interesting in general and worth reading in full.